2.

Chase and Julia are purchasing a townhouse and finance $136,400 with a 20-year 4/1 ARM at 5.15% with a 3/11 cap structure. What will their payments be at the beginning of the fifth year assuming they are charged the maximum interest rate for that year? (4 points)

	$795.63
	$911.52
	$1,006.99
	$1,111.69

3.

Chris and Justine are purchasing a townhouse and finance $112,900 with a 25-year 6/3 ARM at 4.85% with a 2/12 cap structure. What will their payments be at the beginning of the seventh year assuming they are charged the maximum interest rate for that year? (4 points)

	$759.70
	$557.09
	$674.48
	$650.17

4.

Kayla is financing $168,125 to purchase a house. She obtained a 25/8 balloon mortgage at 3.85%. What will her balloon payment be? (4 points)

	$130,626.56
	$131,045.66
	$135,655.10
	$140,657.11

5.

Karen is financing $291,875 to purchase a house. She obtained a 15/5 balloon mortgage at 5.35%. What will her balloon payment be? (4 points)

	$220,089.34
	$219,112.46
	$246,181.39
	$230,834.98

6.

Conan and Gabriella are deciding between two loans.

Loan A	Loan B
$232,800 15-year fixed 6.13% 0 discount points M = $1,980.89	$232,800 15-year fixed 5.81% 1 discount point M = $1,940.68

They have calculated all of the associated fees as well as any other expenses. They have $5,000 available to purchase the points, and plan to stay in the house for three years. Which statement represents the best financial decision? (4 points)

	They should not purchase the discount points because they do not have enough available cash.
	They should purchase the discount points because available cash should always be used to buy points.
	They should purchase the discount points because they will be in the house long enough to justify the purchase.
	They should not purchase the discount points because they will not be in the house long enough to justify the purchase.

7.

Arianna purchased a house for $156,000 and obtained a mortgage for $147,700. She purchased 2 discount points and 3 origination points. What is the cost for each? (3 points)

	discount: $2,954; origination: $4,431
	discount: $3,120; origination: $4,680
	discount: $4,431; origination: $2,954
	discount: $4,680; origination: $3,120

8.

Anna purchased a house for $416,000 and obtained a mortgage for $394,000. She purchased 4 discount points and 5 origination points. What is the cost for each? (3 points)

	discount: $20,800; origination: $16,640
	discount: $16,640; origination: $20,800
	discount: $15,760; origination: $19,700
	discount: $19,700; origination: $15,760

9.

Allison is closing on a house on September 17. The buyer owns the property on the day of the closing. The selling price of the home is $200,500. Allison was accepted for a 25-year fixed-rate mortgage for $185,800 at 6.25% interest. The seller has paid $2,560.43 in property taxes for the coming year. How much will Allison owe in prorated taxes and interest? (4 points)

	$445.48
	$743.06
	$1,188.54
	$1,815.59

10.

Alana is closing on a house on July 15. The buyer owns the property on the day of the closing. The selling price of the home is $250,400. Alana was accepted for a 15-year fixed-rate mortgage for $232,100 at 5.75% interest. The seller has paid $3,197.66 in property taxes for the coming year. How much will Alana owe in prorated taxes and interest? (4 points)

	$1,708.20
	$2,110.72
	$621.52
	$1,489.20

11.

Alice is closing on a house on August 13. The buyer owns the property on the day of the closing. The selling price of the home is $350,700. Alice was accepted for a 20-year fixed-rate mortgage for $324,900 at 5.25% interest. The seller has paid $4,478.51 in property taxes for the coming year. How much will Alice owe in prorated taxes and interest? (4 points)

	$2,617.94
	$887.87
	$2,748.48
	$1,730.07